Business Continuity is an essential part of any organization’s risk management and a big concern for most businesses.
Unpredictable events can affect your business, such as natural disasters, fires, disease outbreaks, cyberattacks, and other external threats. To be prepared for these sorts of crises,it is essential to have a plan that considers various scenarios to know what to do if one happens. A fundamental requirement is the ability to keep vital functions up and running amid a crisis and recover with the least potential downtime. It may not be objective for all companies, but it becomes more feasible when they decide what essential functions and allocate their budget accordingly. Once crucial components are identified, administrators can put failover mechanisms in place.
Business continuity planning involves considering different possible threatening events, such as natural disasters, fires, disease outbreaks, cyberattacks, and other external threats. For any given organization or business, these may include risks considered local (e.g., fire) or global (e.g., terrorist attack). Changes to the business continuity plan are constantly taking place.
Business Continuity Planning is a continuous process that involves keeping up-to-date with changes in your organization, industry, and how it may be affected by new technology. The information used for BCP is based on your willingness to have the plan remain relevant and must be up to date. The most important way of keeping your business continuity planning relevant is to revise it at least annually or after any significant organizational change. It can include new buildings purchased or built, a merger with another company, new employees, and any significant changes that may affect the organization’s ability to adapt to changing environments.
Importance of Business Continuity
Keeping a business open during downtime is difficult, but the small-business owner or organization must have a plan to take care of any interruptions. Business continuity is the process of planning and implementing strategies to ensure a business may continue operating under adverse conditions. Companies must have plans for potential scenarios that could impact their ability to conduct business, such as natural disasters, facility damage, or computer failure. Small companies should designate employees with the responsibility of developing a plan and communicate it throughout the organization.
Business continuity plans should allow for a minimal level of operations maintained during an emergency in addressing potential risks. These plans help ensure that the firm can respond quickly and efficiently in the event of an interruption. A strong business continuity plan will save money and maintain a good company reputation. An extended outage carries financial, personal, and reputational risks. Business continuity planning and risk management build a system of checks and balances into the firm so that both are prepared for an interruption event – such as market volatility or a sudden increase in demand – affecting normal operations.
Business continuity requires an organization to look at its weaknesses and gather critical information. With this, organizations can improve their communication, technology, and resilience in doing business continuity planning.
Business continuity plans are developed based on the risk assessment performed. By performing a business continuity plan, companies can preemptively address all potential problems. This way, a company is prepared for any incidents and alleviates any financial losses due to them. Companies should include in their business continuity plan statements of emergency procedures.
Organizations might be legally required to set up business continuity planning or risk being fined. Because of this, they should never forget to follow corporate policies, rules, and regulations set by regulatory agencies. Below you will find some key steps you can take to put together a business continuity plan for your organization. Remember, you should always look into the future. For this reason, you must be able to gauge if you are ready for inevitable disasters both with your human resources and physical facilities. If you do not have adequate employees or you cannot secure more space when you need it, then disaster can strike you in many ways.
Contents of a Business Continuity System
When a disruption may impact your level of service, it’s essential to have an overarching plan in place. This plan will include contact information you need in a disaster and steps to take depending on which type of incident occurs. The program should be tested, and you should evaluate the plan periodically to make sure you’re prepared for various situations you may face.
Effective business continuity planning includes guidelines for the organization to recover from an event. Complete preparation leads to having no hesitation when responding to disruption not to impact company operations, customers, or employees. It also helps you be prepared for the unexpected, handle unplanned situations and reduce risk.
Business continuity guidelines should be formatted in an easy-to-understand and accessible manner. The plan you develop can include valuable information you won’t want to lose if you’re impacted by a disaster, such as a contact information of department heads who can assist you directly when you need it most.
Business continuity planning involves more than one response level. Not all things are equally critical, so it’s necessary to identify what you’ll mainly focus on maintaining and what could be recovered at a later time. Each company must be honest about the length of time to recover and how much it can stand to lose.
To create a complete business continuity plan, you need to know what you value most and how you can recover quickly. With this knowledge, you’ll be prepared for any situation you might face when you’re ready and able to respond with minimal impact on your company’s operations or image.
A business continuity plan needs the buy-in of all employees at all levels. There needs to be a business continuity manager that coordinates all business continuity activities in the organization. The IT department should be central to designing an IT business continuity response plan.
Critical components of a business continuity plan
There are three crucial components of a business continuity plan. These include resilience, recovery, and contingency plans.
- Resilience refers to an organization’s system, process, or capability to return to a desired state of operation after exposure to unexpected events, including stressors and incidents in less than the anticipated time. The system’s ability to maintain its performance and achieve its critical results despite uncertainties and surprises.
- Recovery is the part of a disaster recovery plan that ensures that systems, assets, or functions return to their desired state following an interruption. The disaster recovery plan includes assigning a lead administrator to control the recovery process, forming teams for different tasks (e.g., physical damage assessment, establishing a crisis communication center), and quickly drafting a plan to resume essential operations and services. The various components of this are as follows: Developing agreements with suppliers and key customers/clients about how work can be continued during a crisis period; Incorporating those arrangements into the business continuity plans for specific units; Conducting periodic drilling and other exercises so that all staff involved in an emergency response know their assignments and respective expectations.
- Contingency plans are customized procedures used by an organization in response to emergency events. They are designed around circumstances specific to a business rather than generic scenarios. For example, two restaurants might have identical contingency plans for a significant power outage, but they may be very different for a leak from their fresh produce supplier.
Differences between Business continuity Plan and Disaster recovery plan
Business Continuity Plan (BCP) is a plan that identifies the risks to your business and establishes corresponding safeguards. It provides reassurance that your company and customers are protected from most potential disruptions, ensuring continuity of all operations. A disaster recovery plan is an emergency management system with procedures for using alternative resources or services when an outage occurs at a primary site.
A BCP differs from a DRP in its scope: whereas DRPs provide periodic updates of what would be done in the event of specific incidents, BCPs are proactive tools—designed before disasters happen—that help avoid threats by preparing mitigations for potential losses or damages.
A business continuity plan is a crucial document for an organization to deal with disruptive incidents to maintain the productive capacity of the organization’s processes. On the other hand, a disaster recovery plan is more about re-establishing your operation once some emergency event has eliminated it. The two programs are usually used in tandem and complement each other. What differs between them is whether an existing risk initiated their development or was created after a severe incident.
How to Develop a Business Continuity Plan
The first step in developing a plan for business continuity is to conduct a risk assessment. It may include an analysis of the different threats and hazards that could disrupt operations. Once all the risks have been identified, an evaluation should be made to determine how severe they are and which ones can be mitigated against or prevented altogether. With some rigorous preparation, this plan will allow us to deal with expected disruptions and any unexpected events that inevitably occur in your times of need.
A business impact analysis would take these risks into account, evaluating what it would cost the company if any one of them were realized. Afterward, companies need to decide whether they should hedge against such risks or accept the consequences if they effectuate.
Calculating the economic losses resulting from a disaster and comparing them with other expected costs allows managers to decide how resources should be devoted to preventative measures. Furthermore, when planning for potential disasters, it’s essential not only to consider possible events
Conducting a BIA lets you inspect which departments are most important for your company to carry on their essential functions in a disaster. The report describes the consequences of various disasters and educates what needs to be done before, during, and after such events.
The BIA considers the effects of potential disruptions and outlines them in the risk assessment, which is informed by a risk register.
How to Develop a Business Continuity Management System
Business Continuity Management (BCM) is the task of arranging for ongoing operations and service availability during a disaster or similar event that interrupts business as usual. It is a “process” to help enterprises plan for their disruptions and suppliers, customers, partners. With an ever-increasing cyber threat landscape coupled with natural disasters and other societal events, protecting one’s own organization against disruption has become essential.
Business continuity planning starts before organizations feel disruption through risk assessment. BCM strategy is developed based on risk analysis that will guide BCM tactics, ensuring tangible resilience best aligned with strategic objectives to meet stakeholder expectations. It enables maintaining desired enterprise functions and quality deliverables during disruptive events. It’s essential to designate who will manage business continuity. It could be one person,
Business Continuity Management Software helps businesses identify factors of risk and create mitigation plans.
Implementing a business continuity plan is continuous and shouldn’t stop just because things are going well. Communication of the organization’s strategy to employees and potential stakeholders should be ongoing so that everyone understands what they’ll be doing in the event of an emergency.
Organizations should review how the test went, make changes accordingly, and plan for regular testing. It is essential if the organization frequently changes its operations or staff. Testing business continuity requires ongoing reviews of procedures and revision as needed to respond to organizational change.
If you need assistance developing and implementing a Business Continuity Management System for your organization, contact us. We’re ready to partner with you and create a plan that will protect the essential functions of your business at all times during disasters or unexpected events. To learn more about how we can assist you in this process, reach out today!
Chris Ekai is a Risk Management expert with over 10 years of experience in the field. He has a Master’s degree in Risk Management from University of Portsmouth and is a CPA and Finance professional. He currently works as a Content Manager at Risk Publishing, writing about Enterprise Risk Management, Business Continuity Management and Project Management.